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Mergers & Acquisitions

Indorama is in talks to buy Oxiteno

A purchase of the Brazilian specialty chemical firm would plunge the polyester producer deeper into surfactants

by Alexander H. Tullo
June 18, 2021

A photo of Oxiteno's new surfactants plant in Pasadena, Texas.
Credit: Oxiteno
Oxiteno's new surfactants plant in Pasadena, Texas

The Thai chemical maker Indorama Ventures has entered exclusive negotiations with the Brazilian conglomerate Ultrapar Participações to buy Ultrapar’s specialty chemical business, Oxiteno.

The parties have yet to hammer out a purchase agreement. “Conditions of the transaction, including value, are still under consideration,” Ultra says.

Oxiteno is one of the linchpins of Brazil’s chemical industry. Among its key products are surfactants, solvents, glycols, ethanolamines, fatty alcohols, glycerin, and fatty acids. It earned $70 million in 2020 on $1.0 billion in sales. Its assets are valued at $1.7 billion.

In recent years, the company has been branching out of its home country. Its biggest such move came in 2018, when it started up a $150 million ethoxylation unit in Pasadena, Texas, on the site of a former vitamin E plant. Oxiteno claims to be the world’s second largest producer of ethoxylated chemicals, behind BASF.

Indorama has grown over the past 2 decades into a global giant in polyethylene terephthalate (PET) resins and fibers. Its sales last year were about $10 billion. And as it built its polyester business, the company became involved in surfactants as well, a direction it has embraced as a diversification maneuver.

In 2012, Indorama bought Old World Industries, a producer of ethylene glycol—a PET raw material—in Clear Lake, Texas. That plant also makes ethylene oxide, the raw material needed for ethoxylated surfactants. Indorama subsequently strengthened the business by buying and refurbishing an ethylene plant to back-integrate ethylene oxide production.

In January 2020, Indorama built on this foundation when it completed the purchase of Huntsman’s chemical intermediates and surfactants unit, a competitor to Oxiteno. That $2.1 billion deal gave Indorama plants in Chocolate Bayou, Dayton, and Port Neches, Texas, and in India and Australia.



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